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Gold Sees More Profit-Taking, Chart Consolidation Amid Better Risk Appetite

(Kitco News) - Gold prices are moderately lower in early U.S. trading Friday, on profit-taking ahead of the weekend and on chart consolidation following recent gains. The gold bulls continue to show resilience as their safe-haven metal has not collapsed even though world stock markets have posted good rebounds recently. April Comex gold was last down $5.00 at $1,234.00 an ounce. March Comex silver was last down $0.075 at $15.095 an ounce.

World stock markets were higher overnight and that means there is better risk appetite in the marketplace. Asian and European stock indexes posted gains to end the week. U.S. stock indexes are pointed toward higher openings Friday morning. A stabilization in crude oil prices recently is a main element assuaging trader and investor worries. Crude oil remains a major “outside market” that has been impacting many other markets on a daily basis.

The other key outside market on Friday morning finds the U.S. dollar index posting modest gains. The greenback bulls have had a good week this week, as prices have begun to trend higher again on a near-term basis.

China is still a focal point for world traders and investors. On Friday the Group of 20 industrial nations met in Shanghai.  Reports said the head of China’s central bank assured his counterparts China will not dramatically devalue the yuan to gain any trade advantages. He also said China’s central bank will employ prudent monetary policy.

U.S. economic data due for release Friday includes the second estimate of fourth-quarter gross domestic product, the University of Michigan consumer sentiment survey, and personal income and outlays.

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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

Technically, April gold futures prices are in a two-month-old uptrend on the daily bar chart and the bulls have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,241.30 and then at $1,250.00. First support is seen at the overnight low of $1,229.20 and then at Thursday’s low of $1,221.80. Wyckoff’s Market Rating: 7.0

March silver bulls and bears are on a level near-term technical playing field amid recent choppy trading. Silver bulls’ next upside price breakout objective is closing March futures prices above solid technical resistance at the February high of $15.99 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is at Thursday’s high of $15.33 and then at $15.57. Next support is seen at $15.00 and then at this week’s low of $14.945. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff, contributing to Kitco News;
Follow me on Twitter @jimwyckoff



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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